Humanomics

By Vernon L. Smith, Bart J. Wilson. 2019

130 citations recorded by the source corpus.

Since winning a Nobel Memorial Prize in 2002 for his experimental research on market institutions, Vernon Smith1 has taken a new direction in his research and writing – reconstructing ideas from what he has called the ‘Scottish-Hayekian’ tradition of classical economics and showing their continuing relevance. In his first major work on this theme, he re-interpreted his own experimental research as a programme of empirical testing of Friedrich Hayek’s account of the market as a discovery process (Smith 2008). My guess is that, for many of Hayek’s disciples in the Austrian tradition of economics, the idea of Hayek as an empirical scientist proposing refutable hypotheses was too shocking to be taken seriously; but I think Vernon Smith’s argument was right. This new book, co-authored by Bart Wilson, marks a new stage in Vernon Smith’s reinvention of himself as a classical economist. In a preface which sometimes sounds like a memoir of a conversion experience, Vernon Smith and Wilson (SW) tell us that it is only quite recently that they have come to understand the true meaning of Adam Smith’s Theory of Moral Sentiments (TMS) (Smith 1759 [1976]) and to realize the limitations of their previous thinking, in which they were handicapped by having been educated in neoclassical economics. Humanomics is their attempt to explain this meaning to modern economists. (Despite the subtitle of their book, they say relatively little about Wealth of Nations (WN).) There are some born-again undertones in the reverence with which SW treat the text of TMS. Apart from some Google Ngrams of historical word frequencies, they do not consider TMS in its historical context. Nor do they countenance the possibility that there might be tensions in Smith’s reasoning. They do little to relate their ideas to the various ways in which, over recent decades, other economists have interpreted and developed ideas from TMS. But, although these features of Humanomics may be off-putting to some Smith scholars, SW have important things to say about the relevance of Smith’s ideas to behavioural economics. SW’s starting point is in the experimental economics of the 1980s and 1990s, which had produced ‘two disparate collections of evidence’. One programme of work – the programme in which Vernon Smith had made his name – had investigated behaviour in laboratory markets and had found that this was well explained by the hypothesis that buyers and sellers act on self-interest. But another programme had found that ‘anonymously paired people were predominantly caring, other-regarding, interdependent actors in the personal, social exchange context of

Subfields: Economics and Econometrics, Safety Research

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